India’s 100 Smart Cities initiative recognizes the country’s growing metropolitan areas as a frontier for opportunity. Unfortunately, the inability of municipal governments to lead may be the greatest barrier to unlocking their full potential.

Within India’s federalist system of central, state and municipal government, states exercise considerable power in local urban development, resulting in inefficiencies and limited municipal capacity. Addressing these structural problems and leadership shortcomings is of utmost importance for the three cities participating in the U.S.-India Smart Cities partnership—Ajmer, Allahabad, and Visakhapatnam—and beyond.

India’s democracy is historically characterized by centralized decision-making. While a 1993 constitutional amendment called for a transfer of power from state to municipal governments, progress is slow and cities continue to depend on state governments for local leadership. In some cities, state-appointed executives wield supreme decision-making authority. Due to a combination of poor recordkeeping, lack of political will, and weak administrative capacity, localities also struggle to collect property taxes. This reliance on states for revenue creates a cycle of dependency and only further reinforces state power in those communities.

These governance challenges are especially acute around physical infrastructure. Management responsibility is inconsistent, with waste management a municipal responsibility and community planning and water supply often under the purview of state ministries. State-led urban planning is regarded as opaque and ineffective and can be limited in scope, overlooking important infrastructure development needs, project financing, and the relationship between land use and transportation. For example, unbuilt land on the metropolitan fringe receives prioritized new construction, at the expense of improving infrastructure and urban design in existing neighborhoods.

These governance issues matter tremendously when it comes to the emerging concept of smart cities. New technologies alone cannot address India’s urban challenges. While cutting-edge digital products tend to capture the public’s imagination, the real engine of these future-looking concepts is a local government that knows how to execute a plan. Yet in many ways, India’s municipal governments are too disconnected from local decisionmaking and execution.